Washington (CNN) - Staff members at eight Head Start centers manipulated income information given to them by undercover applicants so that the applicants would get benefits they were not qualified for, according to a Government Accountability Office report being released Tuesday.

In response to the report, Health and Human Services Director Kathleen Sebelius has notified the more than 1,600 operators of Head Start facilities nationwide of new steps being taken to crack down on fraud.

The GAO report says undercover applicants made 15 visits to 13 centers in six states and the District of Columbia to register their fictitious children.

At eight of those centers, Head Start employees disregarded "part of the families' income to register over-income children into under-income slots" or "lied about applicants' employment status or misrepresented their earnings," the report says.

The Head Start program provides child development services to around 1 million children of low-income families. Because of its popularity, many Head Start centers have waiting lists for spots for children. The GAO report raises concerns that many Head Start slots are taken up by children of families that are not low income, thereby leaving the targeted low income children on the waiting lists.

At a Wisconsin center, the report says, a Head Start associate knowingly included the income from only one of the child's guardians so that the family would qualify for the Head Start program.

And in Pennsylvania, a Head Start associate disregarded $23,000 in income for a family of three so that they would qualify. Then, when told that the mother also received some additional cash income from a part time job, the associate replied, "That's your business," the report says.

The GAO undercover operation also looked at centers in California, Maryland, New Jersey, Texas and the District of Columbia.

In her letter, sent Monday, Sebelius said that the department's inspector general's office is following up on the incidents reported by the GAO, and that those incidents and any other allegations of fraud could result in criminal prosecutions.

Among other steps the Health and Human Services Department will take, she said, are increasing the number of unannounced visits to monitor centers, requiring operators to improve any inadequate controls to prevent errors and other lapses, and developing "new regulations that promote program integrity."

"Allowing ineligible children to enroll in the program is a blatant violation of head Start's rules and it steals opportunity from children who need it most," Sebelius wrote.

soundoff(36 Responses)

Hugo

Take a reality pill Mr. President:

Unemployment at 20% across our Nation
National deficit highest EVER in US History
Shadow real estate market at 17 million held by banks
Commercial real estate posted loss of 65% value
2020 debt to be 95% of GDP
Foreclosures climbing daily and your stimulus did nothing but keep State bureaucrats in their State jobs with State funded healthcare and taxpayer benefits while the private side continues to suffer!

Meanwhile, your minion of Dopes continue to Hope for the Change that progressives contrived, but come 2012 my Comrades do well to run like the reds that you are!

May 18, 2010 04:12 pm at 4:12 pm |

Call 'em OUT

Oh Dave... you are SO not a CPA

May 18, 2010 04:13 pm at 4:13 pm |

jeff jackson, alabama

And all the baby boomers may get screwed
on their social security benefits we worked
for decades to earn.
What about retired civil service employees
who also get a disability check while working
another job for a government contractor ?
NO WAY we should ever be cut on our Soc. Sec.
benefits with all the double and triple dipping
government employees get away with.
We can stick together and make a stand and keep
what we've got coming. There are more of us
than there are them .

May 18, 2010 04:16 pm at 4:16 pm |

a little sad

Dave May 18th, 2010 3:33 pm ET

Okay, before the rampaging conservative bloggers and right wing nut jobs get too frothy about the mouth consider this about the above press release:

The inspectors made 15 visits to 13 centers. The Head Start program administers to one million children. The article above states there are 1600 centers nationwide. That means that the inspectors went to just .008 of the centers nationwide. .....

I am a CPA and a Computer Scientist and crunch numbers all day. This is what I do for a living.

***********************

First off, let me say that I am not going to jump on the "rampaging conservative bloggers and right wing nut jobs", I believe in Headstart and I don't think that the fact that fraud exists outweighs the fact that the needs exist. But the fraud needs to be stopped.

That being said, this is what I do for a living too, and it is called sample testing.

When you do a sample test and you get an exception in 8 out of 13 cases, you have a problem. The centers falsified information in 61.5% of the reviewed operators. By itself, it does not prove their is fraud in 61.5% of the 1600 operators. But it's definitely an indication that more review of other operators should be performed. You claim that "these numbers are not material", but in fact, they are material to your sample test.

Ignoring these results as immaterial is professionally irresponsible. I hope you are not signing off on financial statements dismissing adverse results as being immaterial, when they are material to the sample tested.

That'd be SO Enron....

May 18, 2010 04:17 pm at 4:17 pm |

RM

I am SO TIRED of my hard-earned tax dollars being given to criminals. And that is what this is, criminal behavior.

May 18, 2010 04:19 pm at 4:19 pm |

get real

Dear Some Republican Guy,
That would be TOO LAZY TO WORK, and you want them to SECEDE from the Union, not SUCCEED. Let me repeat. President Obama needs to focus on improving our education system before more students graduate with the lack of basic grammar and spelling demonstrated by our friend, some republican guy!

May 18, 2010 04:25 pm at 4:25 pm |

Steve- Illinois

Dave, or that would mean 50% of the people they randomly talked too were committing fraud. And that's allowing you the "1/2 of them were new excuse." (Committing fraud would get you fired from most jobs, new or not.) Or 2400 nationwide, (probably way low) are most likely also involved in fraud!
Crunch those numbers!

May 18, 2010 04:25 pm at 4:25 pm |

Larry

I love the way President Obama is attacking fraud and corruption in this country.

Is that why the Republicans are all mad and all?

May 18, 2010 04:28 pm at 4:28 pm |

Henry Miller, Libertarian

So eight out of thirteen centres–62%–committed fraud. Head Start's budget is about $8 billion. Extrapolating, that's $4.9 billion stolen from American taxpayers.

But that's okay–the only purpose of taxpayers–notice we're not "citizens' any more, just "taxpayers"–is to obey our superiors and, of course, pay taxes.

At least, that's what government thinks.

Head Start, like all government programs that directly benefit one group of people at the direct expense of another, ought to be scrapped.

May 18, 2010 04:30 pm at 4:30 pm |

Mark from Louisiana

Everyone who receives government entitlements should be checked monthly to make sure they deserve what they get. If jobs are available you shouldn't be able to sit on the porch and wait on a government handout.
At least 50,000 investigators should be hired to do this quickly. The fraud they will find will more than pay their salaries.

May 18, 2010 04:31 pm at 4:31 pm |

midwest

Dave,

You are most certainly not a CPA or "numbers" professional.

The text you quoted is never used in an audit. Who is the "they", maybe quote the AICPA audit standards next time, try doing some research next time IDIOT! ALL Audits are based on samples and statistical analysis.

So DAVE, are you suggesting all Audits should cover all accounts, locations and personnel?

The raw statistics 8 out of 15 indicate (within scope) certainly a qualified or adverse opinion based on the 53% failure to comply with written standards and would require re-testing with a significantly larger sample.

"Maybe the personnel were new".... maybe your an idiot and significantly overpaid for whatever you do for a living!